Tiny Homes vs. Modular Homes: Understanding the Key Differences
- nikki
- Jun 2
- 3 min read
The term tiny home has grown in popularity—but what exactly qualifies as one? And how does it compare to a modular home?
While both can offer a smaller footprint and more intentional living, the way they’re built, financed, and placed are very different. If you're considering either option, understanding these differences is key to making the right decision for your lifestyle or investment.
What Is a Tiny Home?
A tiny home is typically defined as a residential structure that is under 400 square feet. These homes are designed to maximize space, minimize waste, and support simpler living. But not all tiny homes are the same.
One of the most popular versions is the Tiny Home on Wheels.
Tiny Homes on Wheels (THOWs)
A Tiny Home on Wheels is built on a trailer frame, making it mobile and towable. It’s often certified for safety and code compliance by third-party agencies like Pacific West Associates, which ensures the structure is sound—but it’s not considered a permanent dwelling in the eyes of most zoning authorities.
Pros:
Mobility – You can tow your home to a new location
Creative placement – Ideal as guest suites, ADUs, or vacation rentals (where allowed)
Lower initial cost – Typically less expensive than modular homes
Cons:
Limited financing options – You can’t finance them like a traditional home; most buyers pay cash or use personal loans
Parking is challenging – Legal places to live full-time in a THOW can be hard to find and are often limited to RV parks or private land with specific allowances
What Is a Modular Home?
A modular home is built in a warehouse in sections (called modules) and transported to a permanent site where it is assembled and installed on a foundation. Once placed, it's considered a permanent structure—no different from a traditional site-built home in the eyes of zoning, appraisal, and financing.
Key Characteristics:
Built to local and state residential codes
Inspected and permitted like a traditional home
Eligible for mortgage financing
Appraises and insures like a site-built home
Because modular homes are treated as permanent residences, they typically offer more flexibility in where they can be placed, especially on land that requires compliance with square footage minimums, setback requirements, or residential zoning standards.
Choosing Between a Tiny Home and a Modular Home
Your choice depends on your goals, land situation, and long-term plans. Ask yourself:
Do I want a home I can move or one that’s permanently placed?
Do I own land with specific zoning or square footage requirements?
Am I looking for a full-time residence or a seasonal/vacation unit?
Do I need traditional financing?
What’s my budget—and does it include land prep and permitting?
In Summary:
Feature | Tiny Home on Wheels | Modular Home |
Size | Under 400 sq ft | 399 to 1,400+ sq ft |
Mobility | Mobile – built on trailer | Fixed – placed on foundation |
Zoning | Often restricted | Broader placement opportunities |
Financing | Limited to cash or personal loan | Traditional mortgage options |
Code Compliance | Certified by third party (e.g. PWA) | Built to local/state residential code |
Usage | Seasonal, mobile, or flexible use | Full-time living, investment housing |
Which One Is Right for You?
There’s no one-size-fits-all answer. At Movable Roots, we build both tiny homes on wheels and modular homes on permanent foundations—because every client’s needs are different.
Whether you're searching for freedom and flexibility or a permanent home that’s ready for financing and permitting, we’re here to help you navigate the process. Contact us today to set up your free phone consult.
